The RBA is waiting to see how recent interest rate cuts flow through the economy before deciding if it needs to cut the cash rate further in 2013, according to its February 5 meeting minutes, released yesterday.
The bank said there were signs the 1.75 percentage points in interest rate cuts delivered between November 2011 and December 2012 were starting to provide a boost to underperforming sectors, including housing.
‘‘Interest rate sensitive parts of the economy had shown some signs of responding to these lower interest rates, which were well below their longer-run averages, and further effects could be expected over time. Noting that monetary policy was already accommodative as a result of the substantial easing of policy over the past 15 months, and that this stimulus was continuing to work its way through the economy, the board judged that it was prudent to leave the cash rate unchanged at this meeting.’’
While conditions remained soft in the construction industry, members said there were some signs that the housing market had firmed, partly due to the series of interest rate reductions over 2012.